The suspect is alleged to have used an instrument known as a 'put option'.

These products convey the right, but not the obligation, to sell an asset at a fixed price at some point in the future.

They are commonly used by investment professionals to bet on the price of an asset, such as a stock or a bond, falling.

For example, shares of ABC plc are currently trading at 500p.

Fred, an investor, thinks that the shares are over-valued and suspects they might fall.

So he buys a put option entitling him to sell 10,000 shares in ABC plc at 500p each.

A few days later, ABC plc issues a profits warning, sending the shares down to 300p. Fred's option is said to be 'in the money', in the jargon, and so he exercises the option.

He has made a profit of £20,000 (10,000 x 500p-300p), before taking into account his dealing costs.

The opposite of a 'put' option is a 'call' option, in which the buyer receives the right, but not the obligation, to buy an asset at a set price in the future.

But trading in options is a risky business.

Quite often, the underlying asset will not reach the price that it needs for the buyer of the option to make a profit on it - in such circumstances, the option is said to be 'out of the money'.

And betting on the likelihood of a share price falling is particularly risky.

If you own a share and its price falls, your downside is limited - the maximum amount you can lose is the sum you that invested.

If you bet on a share price falling, but instead it rises, then in theory the amount you can lose is infinite.

Simon Cawkwell, the professional stock market trader known to his followers as 'Evil Knievil', has spent a lifetime betting on share prices falling.

He has made a good living from it, thanks to his ability to analyse company balance sheets forensically, but there have been occasions where a stock he has bet on to fall has instead risen - and he has, on occasions, lost as much as £250,000 in the process.

There were rumours, in the aftermath of the 9/11 terror attacks, that members of Al-Qaeda had used options contracts to speculate on falls in airline stocks.